A: This is an important question because most college students will be offered access to a credit card.

The answer is this: College students should only have a credit card IF they understand when and how they should use this type of credit.

Credit cards offer convenience for small purchases and are a great way to establish good credit history. Good credit history is based on using credit wisely, repaying debts, and never missing monthly payments.

The problem is that many students get into trouble by running up credit card debt that cannot be paid back immediately.

This means that the debt stays on the card and interest piles up from month to month. This is called revolving debt and it needs to be avoided as much as possible.

So what does a student need before they accept a credit card?

1. Open a Checking Account: The student will be responsible for credit card charges and therefore the student should have a student checking account in order to pay those bills. If the student does their checking and bill payment online, the checking account should be free.

2. Ability to Pay Off the Credit Card Each Month: It is important never to miss a credit card payment and it is equally important to pay your card off every month. If you cannot do this, you might consider not getting a credit card. You may have access to thousands of dollars in credit, so there will be temptation. Do not fall victim to debt you cannot handle.

3. Avoid Big Credit Card Purchases: Credit cards should not be used for tuition, school fees, housing, or transportation. Use the credit card wisely and make smaller purchases like groceries. Some students use a credit card to buy books, but if you cannot pay that money back immediately, do not use a credit card. Student loans are a better option for any purchase above 500 dollars.

4. Use Student Loans for Large Expenses: Federal student loans are a much better option for large bills like tuition, school fees, housing, rent, and transportation. With federal student loans, no payments are required until after you leave college and the interest rates are low and fixed. Credit cards interest rates are variable and can climb quickly. For example, a Federal Stafford Loan has a fixed interest rate of 6.8 percent. A credit card can have a variable interest rate of 10, 15, 18 percent or even higher.